House of Commons
Monday 25 January 2016
The House met at half-past Two o’clock
[Mr Speaker in the Chair]
Oral Answers to Questions
The Secretary of State was asked—
1. What estimate she has made of the number of children in schools with mental health problems; and what assessment she has made of the capacity of schools and sixth-form colleges to appropriately support those children. (903199)
First, may I take this opportunity to welcome the new shadow Ministers for childcare, the hon. Member for Darlington (Jenny Chapman), and for mental health, the hon. Member for Liverpool, Wavertree (Luciana Berger), to their places on the Opposition Front Bench?
This Government are committed to helping all young people fulfil their potential. Mental health is a personal priority for me as Secretary of State and we are committed to helping schools provide the necessary support. This includes a pilot to improve access to specialist services where needed, and guidance on counselling, behaviour and teaching about mental health. The Government are also investing an additional £1.4 billion in children and young people’s mental health services, which will deliver a step-change in the way these services are commissioned and delivered.
The number of children going to A&E with mental health issues has more than doubled since 2010, and schools are having to manage a growing crisis. Decreased access to support from child and adolescent mental health services is making this much harder. I appreciate the Secretary of State’s warm words, but what guarantee can she give pupils, parents and teachers that this Government are serious about acting on these issues?
Importantly, there is interest in this matter in all parts of the House, and I recognise and welcome that. That is the first step to tackling the stigma associated with mental health and getting people to talk about it, but the hon. Lady is absolutely right that we have to go further. That is why my right hon. Friend the Prime Minister announced £1.4 billion for young people’s mental health services, and a portion of the funding for that was announced recently. Also, the Department is contributing £1.5 million to joint training pilots to look at having single points of contact in schools and CAMHS. Teachers are not mental health workers, but they do have the opportunity to spot problems. They must know, and be able to work with, those in their local health services.
It is clear that this Government are committed to ensuring that young people have good access to mental health support. Does the Secretary of State agree that the Department for Education’s mental health service and “schools link” pilot, bringing in a single point of contact in 255 schools, will mean there is a more joined-up approach between schools and health services, which will positively impact on the mental health of our young people across the UK, and the south-west in particular?
I am pleased to be able to say that the first round of training workshops has been successfully delivered to 255 schools and the second round is now under way. Schools and clinical commissioning groups are taking part in an evaluation of the programme to help us understand whether, and how, having the named lead roles has improved the working between schools and CAMHS and to look at any wider changes across participating schools.
Access to these services for all children and young people is absolutely crucial. With pressures increasing on school budgets, what guarantees can the Secretary of State give that all children and young people who need access to good quality mental health and counselling services are able to get them?
I have already mentioned the joint training pilots. As a Department we have also provided £4.9 million this year to support 17 voluntary sector projects, and this is the first time that mental health services have been a part of that. The teacher voice omnibus survey carried out last summer found that 54% of teachers reported feeling that they knew how to help pupils with mental health issues access appropriate support and 62% reported that their school provided counselling services for pupils needing extra support, but I would be the first to admit we have further to go on this.
In the last Parliament, the Health Committee heard compelling evidence of the need to focus on prevention and early intervention. Much of that, as the Secretary of State will know, is being funded from public health budgets. Will the Secretary of State set out what discussions she will have, and reassure the House that as those budgets come under pressure the very valuable services being put in place will not be affected?
I read with interest the Health Committee report in the last Parliament, and I and the Under-Secretary, my hon. Friend the Member for East Surrey (Mr Gyimah), have regular conversations with our colleagues in the Department of Health and across Government on this issue. Early insights from the local transformation plans, which my hon. Friend the Member for Totnes (Dr Wollaston) will know about, indicate that some areas are already running their own activities to decrease stigma and discrimination, or are planning to do so. Sadly, there remains discrimination against the prioritisation of mental health services even within some parts of the NHS. We have to change that.
I am feeling rather abandoned on the Scottish National party Benches today, and I am wondering whether my colleagues are off celebrating an early Burns Night. I wish any Members who will be taking part in such events a very enjoyable time.
The link between mental health problems and poverty is well documented, with young people from the poorest 20% of households three times more likely to suffer from poor mental health than those from the most affluent 20%. What plans does the Secretary of State have to study the impact of removing the education maintenance allowance on the mental health of the most disadvantaged young people in society?
I agree with the first part of the hon. Lady’s question, although I am afraid that I could not agree with the second part because I could not quite see where she was heading with it. The overall issue is that the mental health of young people from all backgrounds needs to be addressed, in the sense of tackling early intervention and prevention and of ensuring that we produce strong, resilient young people. That is why I have been talking a lot about character education, which is something that I want to prioritise in the schools system in England.
I am delighted by the announcements that the Prime Minister and the Secretary of State have made on this issue, not least because many families in my constituency and in other parts of east Kent have great difficulty in accessing mental health services, particularly for adolescents. Can the Secretary of State reassure the House that her Department’s involvement in these matters will mean that people throughout the education system will be much more alert to the early signs of mental health problems and have quicker access to the medical mental health services?
I agree with my right hon. Friend. That is precisely why the Department has made this a priority. We understand that, although teachers are not mental health workers, they work with young people day in and day out, week in and week out, and they will be able to spot the issues. However, they need to know that when the cases get referred, they will be dealt with speedily by the medical service, which is why we are working closely with the NHS as well. I also want to ensure that teachers are fully equipped to tackle mental health problems and mental health stigma in classrooms, and that is why we have funded the Personal, Social, Health and Economic Education Association to produce guidance and lesson plans to support age-appropriate teaching on mental health issues which can be used in this academic year.
I should like to thank the Speaker for kindly giving me permission to join this departmental question session and others in order to raise these important issues on mental health. At least half the adults who have mental health problems are diagnosed in childhood, so it is vital that we intervene early to promote good mental health in children. I listened carefully to what the Secretary of State said, but it is on her Government’s watch that they will underspend by £77 million on the child and adolescent mental health budget. Concerns have been raised by no fewer than four Select Committee Chairs about this Government’s dire record on PSHE, and we have seen a dramatic increase in the number of children turning up at A&E with mental health problems because the thresholds to access services are increasing. When will the Secretary of State stop the warm words and give us proper action to support the child and adolescent mental health services that this country desperately needs?
I welcome the hon. Lady’s appointment. She will know of my personal interest in this matter, and that I am the first Secretary of State to task one of the Ministers in my Department with specific responsibility for mental health education. It is a shame that she did not have a chance to amend her question—or perhaps her statement—before she stood up. If she had done so, she could have reflected the fact that I have already talked about the joint training pilots, about the £1.25 billion my right hon. Friend the Prime Minister has already announced, about the PSHE Association, about training for schools and about the provision of counselling. I look forward to working with her on this very important issue.
We are making rapid and substantial progress towards our manifesto commitment to provide 30 hours of free childcare for working families. The Chancellor has committed to an increase in funding for free places of more than £1 billion a year by 2020. The Report stage and Third Reading of the Childcare Bill will take place this afternoon, and early implementation is on track for this autumn, with full roll-out in 2017.
May I reassure my hon. Friend that our review of childcare costs, in consultation with the sector, took into account the cost of childcare for every type of provider right across the country? We have announced an increase in the average national funding rate from £4.56 an hour to £4.88 for three and four-year-olds from 2017-18 and will be consulting to ensure that that reaches the frontline. In response to my hon. Friend’s request, I would be delighted to visit nurseries in Hampshire, which, I know, are at the forefront of innovation in the sector.
Next month, I will be holding my fifth annual jobs and apprenticeships fair at the outstanding Mid Cheshire College. Does my hon. Friend welcome the extension of this Government’s commitment to 30 hours of free childcare to help parents get back to work?
I congratulate my hon. Friend on the Weaver Vale jobs fair. He is absolutely right that the purpose of the 30-hour commitment is to help make work pay, help with the cost of living and give children the best start in life. May I suggest that he invites local childcare providers to his jobs fair so that parents can talk to them as well as to potential employers, and I encourage all colleagues to do the same?
Does the Minister agree that a parent’s childcare needs do not end when a child reaches four, and that after school and school holiday childcare is absolutely essential, particularly for working parents? Does he therefore share my disappointment that Westminster City Council is ending all funding for its school-age childcare service, or play service, as part of a £665,000 cut to their children’s services budget?
The hon. Lady asks a very important question about childcare for school-age children. I cannot comment on the specific case of Westminster City Council, but I do know that tax-free childcare, which we have legislated for and which comes into force from 2017, will allow parents to purchase childcare out of school for children from nought to 12, and for disabled children up to the age of 18.
That is an excellent question. There are many excellent school nurseries available. She may be aware that, as part of our last spending review, we announced £50 million of capital funding, and that we will be working with schools that need to expand to be able to deliver the cost of childcare.
The Government’s plans for introducing 30 hours of free childcare for working parents have rightly received cross-party support, but, as we have already heard, there is still some way to go with regard to parents seeking employment. What work will the Minister do with parents who are currently seeking employment to enable them to access the childcare?
It is encouraging to see that the Scottish National party has followed the Conservative party’s lead and is now pledging 30 hours of childcare in the upcoming Scottish elections. The hon. Lady will be aware that we have the childcare element of tax credits in England, so that parents who do not qualify for the second 15 hours can get support for up to 75% of their childcare costs through that policy.
On 14 April last year, the Prime Minister boasted—I cannot do a David Cameron impression—that with a Conservative Government
“you will get 30 hours of free childcare a week”.
As I recall, there was much rejoicing throughout the land. However, can the Minister now confirm that one in three of the families who he said would get the 30 hours of free childcare—and they believed it because the Prime Minister told them that they would—will receive no additional hours at all?
I welcome the hon. Lady to her post. I look forward to her future contributions as vice-chair of Progress, especially as I now understand that to be a front for hard-right views in the Labour party. She will know that for the first 15 hours, the offer is universal— 99% of four-year-olds and 94% of three-year-olds get it. We have been very clear that the second 15 hours is a work incentive. Surely she does not believe that Islington parents on £100,000 a year should be entitled to free childcare. I know that she wants to represent the new core constituency of the Labour party.
The Minister will be aware of the area review of colleges in the Tees valley, which could lead to one or more mergers. The banks will be big winners in this, and I am told that if colleges become liable for penalties for breaking loan contracts that could run into millions of pounds. How much will the banks benefit from these mergers?
This is absolutely the first I have heard about that, and it is certainly not my intention that a single pound of taxpayers’ money should go to benefit banks. The whole point of the area review process is to strengthen institutions so that, like Middlesbrough College in the Tees area, they can offer an excellent service by providing high-quality technical and professional education to local people.
It is fairly amazing to hear an Opposition Member attack the apprenticeship levy, which is something that the Opposition thought was so extraordinarily left-wing that they were not willing to propose it in their manifesto. I should have thought that the modern Labour party would consider it a thoroughly mainstream suggestion. As for the hon. Gentleman’s other comments, he will have observed that his party organised an Opposition debate to attack the 25% to 40% slashing of further education budgets, which did not happen when the Chancellor stood at the Dispatch Box and confirmed that we were going to maintain adult skills funding and 16 to 19 funding.
Returning to the subject at hand, does the Minister agree that it is really important to focus on technical and professional training, and that the best way to do so is to provide apprenticeships that have quality as a hallmark, and attract people who know that that will lead to a job, and know the value of being an apprentice?
I agree entirely with my hon. Friend, the Chairman of the Select Committee on Education. It is particularly welcome to see that the number of apprenticeship starts have, yet again, gone up in the latest quarter. That is true not just for apprenticeships generally but for higher and degree apprenticeships, which give young people the reassurance that an apprenticeship can take them to whatever level they aspire to reach.
The National Design Academy, Stafford University and GMP Design are jointly seeking to locate a 737 aeroplane in Rugely, which would be converted into a design studio to house their new experiential design course. Does my hon. Friend agree that such innovative thinking could inject new energy into post-16 education and training?
I have the privilege of representing the best people in the country, but they have been failed by the Government. My constituents awoke today to learn that the people of Stoke-on-Trent are less likely than people in any other city to leave school with the formal qualifications that they need. A report by the Centre for Cities revealed that 39,700 people in Stoke-on-Trent have no formal qualifications, putting us at the bottom of the league table. Will the Minister meet us to discuss how post-16 education and training providers can best be used to help my city?
We are committed to ensuring that children in every part of the country, regardless of their background or circumstances, benefit from an excellent education. High-quality teachers are central to that ambition. We have recently announced the establishment of the national teaching service, which will place some of our best teachers, including heads of department, in schools that need most support, particularly in areas of the country that find it hardest to retain and recruit good teachers.
I thank the Minister for that answer. Roxanne Vines, the outstanding headteacher of Mill Hill Primary School in my constituency, took up her post following support and guidance from the Future Leaders Trust. Will the Minister join me in congratulating Roxanne on her headship and confirm that the Government will continue to support charities that help great teachers become great headteachers?
I am delighted to congratulate Roxanne Vines on taking up her post as headteacher at Hill Mill Primary School and wish her all the very best. High-quality headteachers are vital if we are to achieve our ambition of excellence everywhere. We are currently funding a range of prestigious development and leadership programmes and qualifications for headteachers and senior teachers through the hugely effective and successful Teaching Leaders and Future Leaders organisations.
My local authority has declared its intention to close a number of schools in Brecon and Radnorshire, including Nantmel, Dolau and Llanbister Primary Schools and Gwernyfed and Brecon High Schools. Does my hon. Friend agree that the best way for pupils to have access to great and talented teachers is to keep excellent local schools open and not allow Powys County Council and the Labour-run Welsh Assembly to close the door on our children’s education?
My hon. Friend is of course right that high-quality teaching is the single most important influence on academic standards. In England, we have more and better qualified teachers than ever before, with the proportion of graduates entering the profession holding a first or a 2:1 rising from 63% to 74% since 2010. I am sure that parents in his constituency will come to their own view about whether Powys County Council’s decision to close schools is an effective or ineffective way of improving the education of their children.
I am very happy to join my hon. Friend in congratulating Mrs Flannery, the headteacher of Eatock Primary School. In fact, I recently wrote to her to congratulate her and her staff on their exemplary key stage 2 results, as 100% of the pupils are making at least expected progress in reading, writing and maths.
May I bring the Minister down to earth? He trumpets the successes of this Government’s education policy, but the fact is that every time the chief inspector speaks he says that the Government are failing to deliver the best possible education for our children up and down the country?
I do not recognise the statements from Sir Michael Wilshaw that the hon. Gentleman is citing. As a former Chair of the Education Committee, he should know better. We are determined to see excellence in every part of the country. Where there are patches where schools are not performing, whether in rural or coastal areas, we are taking action swiftly, and certainly more swiftly than the Government he supported before 2010.
The Minister will know that there are schools in my constituency and elsewhere that want to improve rapidly but are struggling with the challenge of recruitment. One academy principal told me last week that he has spent over £60,000 just on the advertising costs. Is not it time that the Department set up a single pooled vacancies site so that we can have that money going to the frontline?
It is not necessary to spend that kind of money recruiting teachers, because there are many free websites for teacher recruitment. I have been to many schools that have very imaginative ways of recruiting—going into sixth forms, local employers and universities to recruit graduates for their School Direct scheme—and they find very high-quality graduates coming into teaching. The challenge we face in this country is that we have a very strong economy, which is something we would not have were the hon. Gentleman to become Chancellor in a future Labour Government.
We are certainly not burying our head in the sand. We have the highest number of teachers—there are now 455,000, so 13,000 more today than there were in 2010. We are also taking action to deal with the challenge of having a strong economy. We have introduced bursaries—up to £30,000 for top physics graduates. We have introduced the “Your future their future” advertising campaign. We have removed the cap on physics and maths recruitment. We have expanded Teach First. We have incentives for returners; some 14,000 returners came back into teaching last year, which is a record number. We are improving behaviour in our schools to improve retention, and we are dealing with the workload, which is one of the reasons why teachers say they leave the profession.
Quality in Careers Standard
We want to spread excellent practice in schools in respect of careers and employment engagement activity to help prepare young people for successful working lives. That is why I launched the Careers & Enterprise Company, which is connecting employees from firms of all sizes with schools through a network of enterprise advisers drawn from business volunteers. I know that my hon. Friend has met the chairman and chief executive of the company. Its role is to harness exceptional schemes such as the Humber careers gold standard, which my hon. Friend has championed and which encourages the delivery of inspiring careers advice.
It was great to hear at the weekend that the Secretary of State was going to act to give further education colleges and apprenticeship providers access to our schools, but the central challenge in the careers space is the lack of incentives for schools to play with when they have so many high incentives in relation to exams. Will the Secretary of State change Government guidance to introduce a requirement to work towards an award that fits the quality in careers standard?
I thank my hon. Friend for welcoming the announcements that were made at the weekend. He is right: the quality of careers advice is paramount. That is why we have published more robust statutory guidance, and why Ofsted already has to inspect and pass judgment on the ways in which schools prepare young people for their careers.
We are considering how to create the right incentives. We will consult a range of organisations, including the Gatsby Charitable Foundation and the Quality in Careers Consortium Board, and will publish a new careers strategy in the spring.
15. It is bad enough that the Government do not value face-to-face careers advice, but, according to Ofsted, only 8% of young people have even heard of the national careers telephone helpline. What plans has the Secretary of State to raise its profile and prepare our young people properly for the world of work? (903215)
I have already mentioned the Careers & Enterprise Company, which will be working with schools and local enterprise partnerships all over the country to create a network of enterprise advisers and co-ordinators with the aim of ensuring that young people can engage in a range of activities. This is not just about calling a telephone helpline; it is about a mixture of work experience, inviting speakers to schools, understanding why young people are studying certain subjects, and enabling them to get out and experience mini-apprenticeships.
I lost my voice at the weekend, and I am afraid that that makes it a bit harder for me to speak.
The all-party parliamentary group for education will shortly launch an inquiry into how well our education system is preparing children for the world of work. Will the Secretary of State ensure that schools have enough resources to teach “soft” skills, such as IT skills, so that young people are well prepared for their careers?
I very much enjoyed listening to the hon. Gentleman’s question, and I welcome the work of the all-party parliamentary group. We are, of course, already teaching computing throughout all the key stages of the national curriculum, having introduced coding last year. The hon. Gentleman is right to draw attention to the important role of our education system in preparing young people for the world of work and for 21st-century Britain, and I look forward to hearing more from the all-party parliamentary group.
Four years after scrapping work experience at key stage 4, shredding Connexions and local careers service funding, and giving schools careers advice responsibilities but no resources, the best that the Secretary of State could do yesterday was blame schools for outdated snobbery over apprenticeships. Is it not a fact that she has been stung into action by the continued barrage of concern—the director general of the British Chambers of Commerce spoke of a “national embarrassment”—and that the Minister for Skills needs some sticking plaster for his appearance before the Select Committee this afternoon as part of its urgent inquiry on careers advice?
Will the Secretary of State ensure that careers advice and apprenticeship take-up are included in Ofsted’s assessment? Does she think that volunteer enterprise advisers—however hard-working—and a mere £20 million for her enterprise company will undo the damage that we see in the Government’s previous record?
If the hon. Gentleman wants to talk about previous records, he should think about the previous record of his own party in government, when it completely failed to prepare young people for the world of work. In fact, it perpetuated fraud on them by allowing them to do technical and professional qualifications that did not lead either to satisfying the requirements of employers or to university. He clearly failed to listen to my earlier answer in which I said that Ofsted already inspects on careers advice and almost £70 million is being spent during this Parliament in relation to careers.
Social Mobility and Child Poverty
7. What steps she is taking to implement the recommendations of the Social Mobility and Child Poverty Commission’s report, “State of the Nation 2015: Social Mobility and Child Poverty in Great Britain”, published in December 2015. (903206)
The Prime Minister made it clear in his first major policy intervention this year that improving life chances is a key priority for this Government. We will, in due course, publish a strategy setting out all the ways in which we will be fighting disadvantage and spreading opportunity. The strategy will focus on the root causes and human dimensions of child poverty. We will work with the reformed Social Mobility and Child Poverty Commission, which will play an important role in this.
I am sure that the strategy that the Minister mentions will recognise that early intervention is key to improving social mobility. Has he looked at the impact of the removal of the ring-fencing of the early intervention grant, which has led to a 40% drop in the money available for early intervention? What will the impact of that be on social mobility?
The right hon. Gentleman will know that Conservative Members take social mobility very seriously, and we have an excellent record on it; we even allowed the Liberal Democrats into government once. On the early intervention grant, we have increased the amount of money for troubled families and are deploying it in a very targeted way to help the families who need it most.
School Places: Thirsk and Malton
The Government are spending £23 billion on school buildings to create 600,000 new school places by 2021, open 500 new free schools, and address essential maintenance needs. Supporting local authorities in their responsibility to ensure sufficient school places in their area is one of our top priorities. North Yorkshire received £12 million in funding for new school places between 2011 and 2015 and has been allocated a further £40 million to create the further places required by 2018.
Across North Yorkshire we are seeing a 10% increase in the demand for primary school places, and many of my constituents are concerned that we provide the infrastructure to meet rising populations and the increased numbers of houses being built. Will the Minister confirm that the capital funding will be provided to meet that ongoing demand for new places?
As I said, the Department has allocated £40 million to North Yorkshire for places required by 2015. This is based on the local authority’s own forecast of how many places it will need. We encourage local authorities to negotiate significant developer contributions for new places where they result from developments. I would be delighted to meet my hon. Friend to discuss this matter in more detail. Perhaps, through him, I can persuade North Yorkshire County Council to encourage more free school applications.[Official Report, 1 February 2016, Vol. 605, c. 5-6MC.]
This Government understand that for many parents childcare is the main issue. That is why we will be helping parents with the cost of childcare to the tune of £6 billion a year from 2019 onwards.
Childcare and early education are vital to help children to get the best start in life, particularly in the most disadvantaged families, yet this policy does nothing to help the most disadvantaged children, and the Minister’s decision to change eligibility means that those who may benefit most will miss out on the extra 15 hours. What plan does he have to raise its quality in the early years, particularly to address the issue of disadvantaged children who will not benefit?
Disadvantaged children are at the heart of our childcare policy. This Government introduced 15 hours of childcare for disadvantaged two-year-olds, and all three and four-year-olds get the first 15 hours free. As for the second 15 hours, which is a work incentive, it is logical to say that before someone gets 16 hours of childcare, given that they get 15 free, they work one additional hour. That makes total sense.
School Starting Age
I pay tribute to my hon. Friend for his work in supporting and campaigning for summer-born children. Subject to parliamentary approval, we have decided to amend the school admissions code to support summer-born children to enter school in the reception year if their parents decide to defer their start at school. We are now considering other, consequential changes to the code, including whether the due date rather than the birth date of premature children should be used for determining when they will begin school, and we will conduct a full public consultation in due course.
I understand my hon. Friend’s impatience to secure the legislative changes, but it is important that we consider the other changes we need to make to the school admissions code at the same time as making changes to the rules regarding summer-born children. The work is ongoing, and we will begin the consultation in due course.
Schools, internet providers and parents all have a role to play in keeping children safe online. All schools must have regard to the statutory guidance, “Keeping children safe in education”, when carrying out their duties to safeguard and promote children’s welfare. Every school is required by law to have measures in place to prevent all forms of bullying, including cyber-bullying, and e-safety has been a statutory requirement in the computing curriculum since September 2014.
I am very grateful to the Minister for that response because this is key. The Education Committee recently heard from a number of children in care, who raised the issue of the internet and safety on the internet, particularly in relation to self-harm. We heard that when someone types “self-harm” into Tumblr, they get a message of support and are directed to particular websites that will help them. Will the Minister encourage other social media sites to do the same?
My hon. and learned Friend is right to push on this issue. We encourage, and will of course continue to encourage, social media, search engines and blogging sites to help to signpost vulnerable users, including children in care, to accessible sources of information and support through the UK Council for Child Internet Safety board and elsewhere. Most schools filter content and monitor children’s internet usage to protect them from harmful websites, but not all of them do so. That is why we are consulting on requiring all schools to use filters and monitoring systems, so that we can be confident that all children are kept safe online as well as off.
I appreciate the Minister’s response. My constituency of Redcar has obviously just experienced a huge and extreme tragedy with the loss of our steelworks. The challenge now for our further education campuses is to use the £3 million that the Government have provided to ensure that people get back into work. However, the campus at Redcar college has been under threat, and in the light of the review, there is some concern that we may not be able to retain that campus. I want to impress on the Government how extremely important that is for the economic and social regeneration of our area.
First, I want to congratulate the hon. Lady on the absolutely tireless work she has been doing to represent her constituents at this very difficult time. I am glad that we were able to introduce some flexibilities. For instance, budgets have been used to help people to get HGV licences, which would not normally be eligible for state funding. I had the good fortune to visit her constituency and meet some of the SSI apprentices who have found new places. I do not want to anticipate the conclusion of the area review, but I certainly understand how important this kind of skills support is particularly in her community.
Will the Minister’s discussions include South Devon College, which is the main FE provider for Torbay, and particularly its exciting masterplan to create a new campus on the site of a closed factory? That might give some hope to the hon. Member for Redcar (Anna Turley).
South Yorkshire is currently undergoing an area review of further education. How important does the Minister think it is, when looking at post-16 education, that all providers of post-16 education—FE colleges, schools and others—should come together to plan strategically what kids need in their area?
It is absolutely important that the area review starts with a proper analysis of all the different provision in the area, including sixth forms in schools. The right hon. Lady will understand that there are hundreds and hundreds of schools with sixth forms. It is hard enough to get a group of 15 institutions to agree on a plan—they have to agree on a plan: they are not “undergoing an area review”; they are conducting an area review, and it has to be their plan—and it might be hard to include schools in the meetings, but she will be reassured to know that regional schools commissioners are involved in the area reviews.
School Places: Buckinghamshire
Buckinghamshire received £34 million between 2011 and 2015 to create new school places, and it has been allocated a further £27 million for the places that will be required by 2018. That support helped to create more than 5,000 new school places between 2010 and 2014. Many more have been delivered since then or are in the pipeline. In addition, as my right hon. Friend will know, the Sir Thomas Fremantle Secondary School opened in September 2013 through the free schools programme and will provide 420 places when at full capacity.
Notwithstanding that answer from the Minister, we know that the demand for schools in Buckinghamshire continues to grow. The local government settlement for the area is so poor that the county council has warned that it cannot resource the housing growth plans and provide the key infrastructure that is required for new schools and additional places. What support can he give to the Buckinghamshire MPs who have been campaigning together at the Department for Communities and Local Government and the Treasury to ensure that proper support is given to our county council so that Buckinghamshire school children do not lose out?
We are committed to making school funding fairer. In 2015-16, we have made an extra £390 million available to the 69 worst funded local authorities. Buckinghamshire has received an additional £18 million and it will continue to receive that additional funding, as we have included it in the baseline. In future years, we will ensure that funding is fairly matched to need by introducing a national funding formula for schools, as well as for high needs and early years. My right hon. Friend the Secretary of State will bring forward and consult on our proposals this year.
School Places: Chelmsford
As I have said, the Government are investing £23 billion in school buildings to create 600,000 new school places. Essex received £71 million between 2011 and 2015 to create new school places. It has been allocated a further £127 million for the places that will be required by 2018.
I am very happy to meet my right hon. Friend to go through the figures for Chelmsford. In Essex, we created more than 2,000 new places between 2010 and 2014. Many more have been delivered since then or are in the pipeline. I am very happy to discuss his constituency in more detail.
Careers and Enterprise Company
The Careers and Enterprise Company has made significant progress since its incorporation last February. It has set up a national network of enterprise advisers to improve the employer-school link, it has launched a £5-million fund to help in areas where careers provision is particularly poor, and it is developing an enterprise passport for all young children in school.
First, I congratulate Redditch on its excellent work to create apprenticeships. That is at the heart of the work this Government are doing. Pupils should be given every opportunity to fulfil their potential. As my hon. Friend knows, the Government will create 3 million apprenticeships. The Careers and Enterprise Company will help young people find the right route to continue their development.
There are a number of ways to develop comprehensive careers advice and guidance. The Careers and Enterprise Company, in which we invested £20 million, is one part of that. As my right hon. Friend the Secretary of State has said, in the spring we will publish a comprehensive strategy for how schools can work with the company and the plethora of other organisations out there to deliver the right level of careers education, starting from primary level right through to the end of school.
First, let me congratulate the 107 people who were recognised for their services to education and children’s services in the latest new year’s honours list. They include headteachers, classroom teachers, school governors, foster carers, children’s social workers and people working in adoption and early years settings. I am sure the whole House will want to congratulate them and thank them for the work they do.
May I also extend my support to all the pupils, teachers and communities affected by the recent floods in the north of England? I saw for myself the impact on schools in Carlisle recently, and the Minister for Schools has visited Yorkshire and Lancashire to see the impact for himself.
The Minister will be aware of the case of Poppi Worthington, a constituent of my hon. Friend the Member for Barrow and Furness (John Woodcock), and her tragic death. Does she support the calls from both sides of the House for an independent investigation into the circumstances and failings before and after Poppi’s death?
Poppi’s death was clearly an absolute tragedy. It is vital that we understand what has happened and have the opportunity to learn any lessons. The serious case review into her death will be published shortly, and I welcome the announcement by the Crown Prosecution Service that it will review the case. We do have concerns about Cumbria children’s services. They were inspected in May last year and found to be inadequate. There have been some improvements, but not enough. We will review progress in the workings of the children’s services in March and take a further decision. It is right to wait for the serious case review and the CPS review, but of course we will keep this matter actively under review, including the demands for an independent inquiry.
T3. As we approach Holocaust Memorial Day this Wednesday, will the Secretary of State and my hon. Friend the Minister for Schools reaffirm her Department’s commitment to continue funding the Holocaust Educational Trust’s “Lessons from Auschwitz” project, which has enabled 28,000 students and teachers to visit Auschwitz-Birkenau? (903191)
My hon. Friend is right: every young person should learn about the holocaust and the lessons it teaches us today. In recognition of its significance, teaching of the holocaust is compulsory in the national curriculum. For the past 10 years the Department for Education has funded the Holocaust Educational Trust’s “Lessons from Auschwitz” project, which, as my hon. Friend said, has taken more than 28,000 students to visit the site of the Auschwitz-Birkenau concentration camp. We will continue to promote, support and fund teaching of the holocaust.
As somebody who went on a “Lessons from Auschwitz” visit with schoolchildren from Manchester in the last few weeks, may I echo earlier comments about how moving and important it is?
In their manifesto of 2010—notably dropped in 2015—the Conservatives pledged to
“close the attainment gap between the richest and poorest”.
Revised GCSE results published last week showed that, despite Lib Dem policies such as the pupil premium, the GCSE attainment gap between pupils on free school meals and their peers has actually widened since 2010. With the Conservatives now governing alone, can the Secretary of State tell the House whether closing the attainment gap is still an objective and, if so, why she is allowing it to widen on her watch?
I welcome the hon. Lady’s comments about the “Lessons from Auschwitz” project. Like her, I have visited Auschwitz with schools in my constituency. It was an incredibly moving experience, and I recommend that all Members of the House take the opportunity to do so.
Of course closing the attainment gap remains absolutely a goal—and not just a goal, but something we are moving and working towards in Government, which is why we continue to fund the pupil premium. [Interruption.] The difficulty with the hon. Lady’s statements on this and other matters is that she needs to understand and interrogate the figures that are published, because the changes we have made to the accountability of the examination system make it impossible to compare GCSE threshold measures across the years. If she had interrogated them, she would know that the attainment gap between disadvantaged pupils and their peers has narrowed by 7.1% at key stage 2 and 6.6% at key stage 4 since 2011.
The Minister is moving the goalposts, as ever. All the evidence tells us that the most important factor in determining how well children do is the quality of teaching, especially for the most disadvantaged, yet at the start of this academic year half of all schools were struggling to cope with unfilled teaching positions, relying on supply teachers, non-specialists and unqualified staff. Teacher shortages are particularly acute in maths, science and English. Talk to any head anywhere in the country and they will say that such challenges are the biggest challenge they face. Given that the situation is getting worse, will the right hon. Lady, first, admit to this House that there is a problem—indeed, a crisis; secondly, agree that she should urgently look again at her Government’s chaotic and confusing approach to recruitment; and, finally, come forward with a proper strategy for retaining excellent teachers by looking at workload issues and the constant chopping and changing being inflicted on schools by her Department?
What the hon. Lady calls moving the goalposts, I call restoring rigour to the exam system, making sure that our young people are getting qualifications that will set them up for life and for the world of work. Yet again, I am afraid to say that she has missed the point, because we have already talked about teacher recruitment and we have already announced plans for the National Teaching Service to help schools to recruit. Again, if the hon. Lady interrogated the figures properly rather than jumping for the quickest soundbite, she would know that not only have we increased the number of teachers we are seeking to recruit in subjects such as English and maths, but we have exceeded our recruitment targets for precious years—in fact, we have recruited more postgraduates in both English and maths, and we recruited 116% of the teachers that we needed at primary schools. It is extraordinary that she should seek to give lessons to this House, as she was the lady who not only commissioned the “Ed stone”—the carving of the promises—but then managed to lose the receipt.
T6. Will the Secretary of State join me in encouraging schools in my constituency and right across the country to participate in Clean for the Queen from 4 to 6 March this year and help to tidy up their local communities ahead of Her Majesty’s 90th birthday? (903194)
What an invitation! Just as my hon. Friend has the Litter Free Evesham campaign in his own constituency, so we have the Crewe Clean Team and Nantwich Litter Group in mine and they do fantastic selfless work. They set an excellent example to schools and others, all of whom, I am sure, would be delighted to get involved with the Clean for the Queen campaign. As we know, through the National Citizens Service, social action is a wonderful way for young people to build those all-important character traits—respect, motivation and community pride.
T2. St John’s infant school in my constituency is struggling to obtain support for its breakfast club because eligibility is now linked to pupil premium funding. With free school dinner already provided for all pupils, there is no incentive for parents to apply for the premium, despite the vast majority of pupils coming from some of the most deprived areas in the country. Will the Minister take action to ensure that children from deprived backgrounds do not lose out on breakfast because they have lunch? (903190)
We do not want any pupils to lose out, which is why we have continued with the pupil premium in this Parliament, having spent more than £6.5 billion on the pupil premium in the previous Parliament. It is also why we introduced the universal infant free school meals. There are some fantastic breakfast club schemes. If the hon. Lady wants to write to me, I or one of the Ministers will happily have a further conversation with her about this.
T7. We have a desperate need for extra school places in my constituency, most acutely secondary school places in Wharfedale. Bradford council says that it received only £727,000 for school place funding for 2017-18, compared with £9.6 million in the previous year. Will the Minister ensure that sufficient money is given to resolve the issue of school place requirement in Wharfedale, and will he ring-fence any such money given to Bradford council to ensure that it is spent in Wharfedale? (903195)
As my hon. Friend knows, the Government allocate funding for new school places on the basis of forecasts of need provided by local authorities, and these forecasts change from year to year, reflecting local demographics and the effect of previous years’ capital spending. I know that the Department’s officials are in close contact with Bradford Metropolitan District Council, but I would be happy to meet my hon. Friend if he would find a further discussion helpful, and perhaps liaise through him with Bradford council.
T5. Swiss Cottage School in my constituency is an outstanding school that looks after children with special, complex and emotional needs. Regrettably, it is having to turn away pupils because of limited capacity. Does the Secretary of State believe that her Department is doing enough to look after children with special, complex and emotional needs, and does she believe that there is adequate provision for such vulnerable children across the country? (903193)
I actually visited the school in the course of the past year and found it to be truly exceptional. It is staffed by a wonderfully talented headteacher and members of staff. We have invested in all schools, both those catering for special educational needs and those in the mainstream, but there is more we can do to prepare teachers for teaching children with special educational needs. We have a dedicated capital funding stream for schools catering for children with special educational needs. I strongly encourage her school to apply.
T10. Many headteachers in Amber Valley report that they have real problems supporting pupils who are keen to learn but who suffer from chaotic home lives. What more can the Government do to help headteachers in that situation so that they do not end up being a co-ordinator of a social services operation? (903198)
My hon. Friend raises an important question that many schools raise on how they ensure that every child is in the best possible place at home so that they can learn at school. He will know that the troubled families programme during the last Parliament, which turned around 99% of the 120,000 families, was extremely successful in supporting schools with those difficult families. We now have a more ambitious programme over the next five years involving 400,000 more families, including in the Amber Valley, to ensure that they get the support they need so that their children can go to school to learn and make a good future for themselves.
T8. Becoming an adoptive parent or a kinship carer marks a lifelong commitment to a child, and yet social services do not have that ongoing obligation to parents. Will the Minister urgently review the long-term support available to parents and kinship carers and fund that vital provision? (903196)
The hon. Lady will know that, through the work we did in the last Parliament, support for kinship carers through the family and friends guidance has set out very clearly the expectations on local authorities. Through the review of special guardianship orders, we have looked at the support that is needed post-placement for children who find themselves in that type of arrangement. Part of our overall strategy that we set out last week on children’s social care shows the ambition we have to ensure that every child gets the support they need, whatever the type of long-term placement they happen to be in.
According to analysis in The Daily Telegraph, Kingston was the best local educational authority in the country for GCSE results. Will my right hon. Friend the Secretary of State join me in paying tribute to teachers and pupils in Kingston? Will she explain to the House how learning from the best schools will be rolled out across the country to help those schools that still have some way to go?
As somebody who was educated in Kingston, I pay tribute to all the schools and teachers who operate there—they are much better than they were in my day. I pay tribute to the fact that my hon. Friend is talking about excellence and positivity, and about learning from other schools, which is much better than the constant negativity we hear from the Opposition.
Is the Secretary of State as alarmed as I am that Poppi Worthington was not previously known to social services despite the fact that her mother had previously had a child taken into care, and her father had been investigated on two separate occasions due to child sexual abuse?
I pay tribute to the work the hon. Gentleman has done as the local Member of Parliament in speaking up on this case. Yes, I am alarmed. As I said in my earlier answer, Cumbria is in formal intervention from my Department and is being supported by an interventions adviser. In the most recent inspection, the services were found still to be inadequate. As I have said, we will review progress in March this year as part of the broader package of reforms we know we need to introduce to tackle failing children’s social services departments, which only let down the most vulnerable.
I thank my hon. Friend for raising an important point, which my hon. Friend the Minister for Children and Families has already touched on. We are looking at raising the qualifications of social workers, attracting the brightest and the best into the profession, and making sure there is strong leadership for them to benefit from. We are also looking at setting up a new body to regulate the training of children’s social workers, who form a hugely vital, but often under-appreciated service, and we want to make sure that it gets the same attention as our teachers and schools rightly do.
Thank you, Mr Speaker.
Many churches, youth groups and youth organisations are concerned that they may be subject to Ofsted regulation as a result of the nationwide registration scheme. The Prime Minister has said that they will be exempt: the head of Ofsted has said that they will not. Will the Minister tell us who is right?
It is right that we are asking the question about registration of out-of-school settings and therefore inspection, but the Prime Minister and I are clear that that is not to apply to organisations such as Sunday schools. Indeed, I am a Sunday school and Bible camp teacher myself. The hon. Gentleman should also look at the statement issued by the head of Ofsted after his recent appearance, in which he clarified that he was not correct and that we are right to say that Sunday schools and others will be exempt.
I must inform the House that the hon. Member for Ogmore (Huw Irranca-Davies) has written to me, giving notice of his wish to resign from the Chair of the Environmental Audit Committee. I therefore declare the Chair vacant. I know the House will wish to join me in expressing its collective appreciation of the commitment to, and passion for, the remit of that Committee that the hon. Gentleman has exhibited since he took up the Chair shortly after the general election.
The following will be the arrangements for electing a new Chair of the Environmental Audit Committee. Nominations should be submitted in the Lower Table Office—[Interruption.] If Members would have the courtesy to listen, it would be appreciated—by 5 pm on Monday 8 February. Following the House’s decision of 3 June 2015, only Labour Members may be candidates in this election. If there is more than one candidate, the ballot will take place on Wednesday 10 February from 10 am to 1.30 pm in Committee Room 16. Briefing notes with more details about the election will be made available to Members and published on the intranet.
HMRC and Google (Settlement)
I am proud of the work the Government have done to make our tax system internationally competitive, but also to make sure that those taxes are paid. Time and again, we have taken the lead, domestically and internationally, when it comes to getting international companies to pay their fair share of tax. This is the Government who, working through the G20 and OECD, led on the base erosion and profit shifting project—BEPS—making the international tax rules fit for the 21st century. This is the Government who introduced a diverted profits tax to address the contrived movement of profit out of the country, so that profits from UK activities are taxed in the UK. And this is the Government who have invested heavily in HMRC to strengthen its compliance activity, which has allowed HMRC to secure around £100 billion in additional compliance yield over the last Parliament, including more than £38 billion from big businesses.
We have competitive taxes—that is why we have cut our rate of corporation tax so that it is the lowest in the G7—but we are also making sure those taxes are paid, reforming the international tax rules, introducing a diverted profits tax and investing in HMRC’s capacity. That is action taken by this Government that was sadly lacking in 13 years of Labour rule.
The statement made by Google at the end of last week is solid evidence that companies are changing their models and reviewing their structures because we have strengthened the rules. The statement comes at the conclusion of a lengthy inquiry by HMRC. The tax that individuals and companies pay is collected by HMRC enforcing the law, not politicians who are, rightly, not engaged in or informed of particular cases. I am therefore unable to go into the details of the inquiry’s conclusion beyond those made public at the end of last week. I would point out, however, that the National Audit Office examined the HMRC settlement process in 2012 and examined specific settlements. In all cases, the NAO concluded that HMRC obtained a reasonable settlement for the Exchequer. It also made recommendations on the process by which HMRC should operate when reaching a settlement—recommendations that have been implemented.
It might be helpful to the House if I reiterate what the law is and how the corporation tax rate works, both in the United Kingdom and around the world. The first thing to note is that corporation tax is charged on profits, not on turnover. Equally important, corporation tax is not calculated on the basis of profits attributed to sales in the United Kingdom, but to economic activity and assets located in the United Kingdom. To illustrate my point, imagine a UK company—a car manufacturer, for instance—manufactures its vehicles in the United Kingdom, but half its profits come from sales in the United States. The law as it stands in the UK, as elsewhere, would mean that those profits would be taxed in the United Kingdom, the place of activity, and not the United States, the place of sales.
Ever since 2010, we have been engaged in reforming the tax system both domestically and internationally. Government action is levelling the playing field among businesses, giving worldwide tax authorities more effective tools to tackle aggressive tax planning and helping us to better align the location of taxable profits with the location of economic activity. We are incentivising businesses to do the right thing and come to the table early. Last week’s announcement represents an important result of those actions. I can assure hon. Members that we will continue to tackle the tax risks posed by multinational companies over the coming years, giving the Exchequer more money to fund the public services we all rely on.
I thank the Minister for his statement. However, many will feel it is a display of disrespect to this House that the Chancellor of the Exchequer confirmed the deal with a tweet over the weekend, but has refused to come here today personally to make a statement.
I pay tribute to the former and current Chairs of the Public Accounts Committee, my right hon. Friend the Member for Barking (Dame Margaret Hodge) and my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), as well as all the campaigners for tax justice who have forced this issue on to the agenda. The Chancellor has managed to create an unlikely alliance between myself, the Sun newspaper, the Mayor of London and, according to reports, even No. 10 this morning. All of us think this deal is not the “major success” the Chancellor claimed at the weekend.
The statement offered today has left a number of questions unanswered, which I turn to now. Does the Minister not agree that it is important in our tax system that everybody is treated equally and fairly, whether they be large multibillion-pound corporations or small businesses? In that respect, independent experts have suggested that the effective tax rate faced by Google is now about 3%, despite estimated profits of £1 billion in 2014 alone. Will the Minister confirm whether this is the effective tax rate faced by Google over the past 10 years? In the interests of openness and transparency, will he now publish details of the deal and how it was reached? Will the Minister confirm that Google is not changing the company structures that enabled this avoidance to take place over the past decade? Are the Government not concerned that the agreement creates a precedent for future deals with large technology corporations, such as Facebook and Amazon? Will the Minister assure us that this deal does not undermine international co-operation on tax avoidance, such as the OECD base erosion and profit shifting scheme that the Chancellor once supported?
I also ask the Minister, once more, to halt the programme of HMRC staffing cuts, which is undermining morale and removing the very staff with the collective experience and expertise in collecting these taxes. Finally, will he address a confusion that seems to have arisen? Does he agree with the Chancellor, who thinks the deal was a major success; with the Prime Minister’s Office, which said this morning it was only a step forward; or with the Mayor of London, who described it as derisory?
I welcome the progress the Government have made over the past six years in ensuring that large companies pay more tax. At a time when we have been cutting the rate of corporation tax, corporation tax receipts, excluding North sea oil, have remained buoyant, partly because we have been more effective than ever at collecting tax from large companies. HMRC’s operational capability in this area has been strengthened—by the way, HMRC staff numbers are going up, not down, this year.
The shadow Chancellor mentioned the 3% figure. That is the very reason I drew attention to how corporation tax is worked out. It is worked out on the basis not of sales profits in a country, but of the economic activity and assets held in a country, and there would be severe dangers to moving in the direction of basing it on sales profits. He is right that every taxpayer should be treated fairly and has to pay the rate determined by the law; there is no lower, special rate for Google or any other taxpayer in this country.
We are collecting more tax, which is evidence of the steps we have taken, in both the BEPS process and the diverted profits tax, forcing companies to change their behaviour. That should be welcomed around the House. The real threat to collecting tax revenue from big businesses would be the anti-business policies of the Labour party.
Last week, the Treasury Select Committee agreed the terms of reference for an inquiry into, among other things, problems with the corporate tax base. Does the Minister agree that Google might be a symptom but is probably not the cause of these problems; that those lie with the immense complexity of the tax system, which is rendered more problematic by the globalisation of tax liability; and that therefore fundamental reform of the corporate tax base probably now needs to be considered?
My right hon. Friend raises an important point. Our international tax system is based largely on that set up in the 1920s, but the world has moved on and the way multinational companies operate has changed significantly. That is why, some years ago, led by my right hon. Friends the Prime Minister and the Chancellor, we encouraged the OECD to establish the BEPS project. We are now seeing the first signs that that is working—that companies are changing their behaviour and the tax system is becoming better suited to the modern world.
First, the diverted profits tax, set at 25%, came into effect last April. May we have the Minister’s assurance that the Google deal does not cover any of the period when diverted profits tax should have applied? Secondly, the rules on disclosed evasion are clear: tax should be paid at 100%, plus interest, plus a 30% penalty. May we have his assurance that that was rightly not applied in this case? Finally, given the difficulty the Netherlands got into with the Starbucks deal and Luxembourg got into with the Fiat deal, when the Commission insisted they recoup between €20 million and €30 million extra, should the Google deal not be put to Commissioner Vestager to ensure that it complies with state aid rules?
The United Kingdom does not engage in special deals with any taxpayer. When accusations to that effect were made before, Sir Andrew Park, a retired High Court judge, investigated them on behalf of the National Audit Office and concluded that in every case he had investigated the settlement was reasonable and the overall effect of the arrangements was good. For the very reasons I set out, I cannot comment on the individual matter beyond what is in the public domain. I do believe that there is an important principle here—that tax should be collected on the basis of the law, and that a Department that is independent from Ministers should be able to make the assessment of the right level of tax due under the law without politicians interfering in operational matters. I hope that that has the support of Members of all parties.
Will my hon. Friend assure me that some investigation will be made into how HMRC managed to allow this to go on for such a long period of time? Given that this started under the last Government and it has taken this Government to tackle the issue and bring it to book, will my hon. Friend help me to understand what lessons should be learned?
The information is in the public domain that HMRC launched an inquiry into the tax affairs of Google in 2009. This is a complex matter, but I am pleased that that inquiry has reached a conclusion. It would be fair to say that the progress made on bringing in a diverted profits tax and the reforms involved in the base erosion and profit shifting project appear to represent a shift in the behaviour of a number of companies, which is to be welcomed.
I am sure that my other colleagues on the Public Accounts Committee will be looking forward to hearing from Google and HMRC about this deal. The inquiry into the tax situation that many of these companies seem to be applying to what they should pay in a fair way to the UK public purse was started under Labour, and yes, it continued over the last five years, but last year, in the Budget before the general election, the Chancellor said that he would not tolerate this behaviour, declaring:
“Let the message go out”—[Official Report, 18 March 2015; Vol. 594, c. 772.]
and claiming that there would be an end to this sort of play. Given the £24 billion-worth of UK revenues over this period, experts have said that Google should have paid taxes of almost £2 billion, so does £130 million really meet the test of no tolerance?
I want to address this point and engage seriously with Members on the calculations that we have seen in the press, suggesting some of these very large numbers. As far as I can see, those calculations are based on looking at the profits attributed to the sales in the United Kingdom, and there is a very important distinction between profits attributed to sales versus profits attributed to economic activity and assets. The UK is a country that is very creative. We have a very strong scientific base. As a country, much economic activity goes on here that is involved in then exporting goods and services, and the profits from those exports should, I believe, be taxed in the UK where the economic activity occurs, not in the countries where the sales may occur. If we accept that principle, it does, I have to say, rather discredit the claims of a 3% tax rate.
Although we fully appreciate in the House that the international rules are ferociously complex and that there can sometimes be variations in how they can be interpreted, will my hon. Friend please assure the House one way or the other whether Google has actually broken any laws that were in place between 2005 and 2011—or is this just an outcome of negotiations?
Again, I cannot comment on that—in large part because I am not privy to information that is not in the public domain—but I can say that an inquiry has been in place for some years and that it has now reached a conclusion. The consequence of the conclusion of that inquiry is, as Google has stated, that an additional £130 million is being paid to the Exchequer. Google has also made it clear that it has made changes in how it structures some of its arrangements, and that will obviously have an implication for future tax liabilities.
No one should underestimate the complex nature of trying to tax globally active corporations such as this. It is speculation to talk in terms of the numbers that have been bandied around. However, in view of the Government’s desire to get an international arrangement in place, can the Minister tell us today whether he believes this deal sets some sort of precedent, or is it just a one-off arrangement?
The important point to note is that the individual tax affairs depend on the application of the facts in the case; as I have mentioned a number of times, it depends on the economic activity and assets that are held in the UK, or indeed other jurisdictions. But I do think this signifies that companies are looking at their tax arrangements and there is a closer alignment between tax and economic activity, which I certainly welcome. That is what the BEPS—base erosion and profit shifting—process is designed to achieve, and that is what the UK Government have been advocating for some years now, and I believe we are making progress on that.
The reality is that the practice of companies organising their business over multiple jurisdictions to minimise their tax liability is not new, and even if the diverted profits tax were to apply it would barely make a dent on Google’s real tax liability. Given that this week all our constituents and small businesses will be filing their tax returns and do not have the luxury of negotiating their own sweetheart deals, what message does the Chancellor think he is sending to those individuals and businesses by saying this paltry sum of money from Google can possibly be considered, as he says, a major success? Does this now show how complacent Ministers are?
All businesses have to pay tax under the law. It is under this Government that we have seen the diverted profits tax brought in, and it is under this Government that we are seeing the BEPS process change the behaviour of companies. We did not see any of this from the last Labour Government, and all we end up with is unsubstantiated claims about sweetheart deals, insulting HMRC staff, who have worked for years to ensure that Google and other companies pay the tax due under the law.
Does the Minister agree that in the mad world of corporation tax on international companies this sum of money is at once derisory, substantial, lawful and completely unacceptable to the public, and will he therefore also agree that it is time for a complete overhaul of the corporate tax system?
The point I would make is that this is a highly complex area, but there is a need for international co-operation in it, which is why we instigated the OECD looking at this as part of the BEPS process. That process has come forward with a number of recommendations. We have already legislated for two of those recommendations. There is a third that we are specifically looking at and consulting upon in terms of interest deductibility. It is right that we bring the international tax system up to date to reflect the way multinational companies are working. This has been left for too long; we are taking action.
Does the Minister recognise that people’s anger is very legitimate and even more justifiable given that Google is effectively freeriding on publicly funded infrastructure, not least the £1.2 billion the Government have invested in superfast broadband, and may I urge him again to make sure these calculations are put in the public domain so people can see how the figures are arrived at?
We will see if the National Audit Office wishes to look at this particular area, but again I point to the fact that previously when people have made allegations about particular arrangements, it has turned out on closer inspection that that has not turned out to be true.
As the former Labour Chief Secretary to the Treasury, the right hon. Member for Birmingham, Hodge Hill (Liam Byrne), left that well-known note stating, “I am afraid there is no money,” does my hon. Friend agree that this is evidence that not only did the former Labour Government spend too much of our money, but they did not collect appropriate taxes?
The problem is that the Conservatives have form when it comes to arranging mates’ rates for taxation. They gave a massive tax cut to big City banks, particularly in relation to profits brought in from abroad. They also gave a massive tax cut to hedge funds, £25 million of which arrived in the Conservative party’s coffers last year, and now we have this deal. City banks, hedge funds and globalised corporations—the three bodies the modern Conservative party exists to serve. So let me ask the Minister: why should my constituents in Chester, who work hard and play by the rules, subsidise these big globalised corporations?
Thank you, Mr Speaker. Is the Financial Secretary to the Treasury familiar with the report from the Oxford University Centre for Business Taxation that was published a short time ago? It itemised 42 anti-tax-avoidance measures that the coalition Government put in place, including the general anti-avoidance provisions, the banking code of conduct and the diverted profit tax, which will raise an additional £34 billion between 2011 and 2020.
I and many other Members on this side of the House have seen representatives of small businesses queueing up at our surgeries to complain about the sweetheart deals that big businesses seem to be able to get while they themselves cannot get assistance from HMRC. I wrote to the Minister to ask him to meet me to talk about small businesses, but sadly he said no. May I take this opportunity to ask him again? Please will he meet me to talk about the impact of tax on small businesses in Wirral?
My hon. Friend has set out a laudable objective. We have to recognise that the nature of international businesses is often inherently complicated, but we also have to ensure that our legal system and our tax laws are brought up to date to reflect the way in which businesses work in the 21st century.
If any of the thousands of wonderful small businesses in this country failed to pay their taxes for 11 years, they would not be sitting negotiating with HMRC; they would be sitting down with the police. Can the Minister therefore understand the anger of small businesses and taxpayers when a quarter of calls to HMRC are not even answered? Will some of this money go into sorting that out?
First, on customer service, the hon. Gentleman makes a fair point. Taxpayers are understandably exasperated when customer service is not good enough, although I am pleased to say that at the moment the service is performing better than in any January in recent years. I stress to the hon. Gentleman and the House as a whole that it is very important that we have one tax system and fairness applied to every taxpayer. We must also recognise, however, in relation to some of the accusations, that some of the calculations that are used do not reflect the reality for particular companies. It is absolutely right that HMRC pursues all companies, even over many years, to make sure that the right amount of tax is paid.
As a journalist, I had the dubious privilege for a couple of years of breaking the story of how much tax Google had paid. With that in mind, I had to look at the international arrangements that Google also makes. Is the Minister aware of any country outside of America—other than Britain—that has a deal with Google that is as good as this one?
At a time when the Government expect small businesses to do tax returns four times a year, does the Minister not understand that many of those small businesses will be outraged that a firm such as Google can get off with paying no tax for 10 years and then finish up with a paltry bill that includes fines and interest? At the same time, we have a refusal by the Government to show how that sum was raised. Surely, to avoid the feeling of cynicism among many taxpayers, we should at least have some transparency about how the figure was reached.
We are determined to ensure that all businesses pay the tax that is due. May I specifically address the hon. Gentleman’s point about quarterly returns? There will be a Westminster Hall debate on that matter in 25 minutes, and the point that I shall make is that there is no requirement for quarterly returns. Businesses should keep their information digitally and send summaries of that information on a quarterly basis. That is very, very different from quarterly returns.
When it is in the public domain that one technique used by Google, Facebook and others is the so-called double Irish arrangement, by which profits in the first instance leave the UK and go to Ireland, is there not more that we can do with our European partners to use state aid rules on countries such as Ireland and Luxembourg, which undermine our tax base in that way?
My hon. Friend raises an important point. There is a need for international co-operation at an OECD level, which is the principal focus, and at an EU level. He will be aware of action that the European Commission has taken in respect of other member states that have had concerns about state aid.
No—[Laughter.] That is because of taxpayer confidentiality. The point that I was trying to make was that the rate cannot be calculated by looking at profits from sales in the United Kingdom. The tax rate is currently 20%, and that applies to everybody, but the effective tax rate depends on the particular circumstances of any business.
Does the Minister agree that it is worth remembering that this matter has been outstanding not for one year or five years, but since the middle of the previous Labour Government, who failed to do anything about it? It is this Government who have taken effective action to collect these tax receipts. The Opposition should check their facts; perhaps they could google them.
The deadline for submission of self-assessment tax returns is in six days’ time, on 31 January. What consideration has the Minister given to reaching deals, victorious or otherwise, with any of my self-employed constituents who miss that deadline?
Let me return to this case. There has been a lengthy inquiry by HMRC into the affairs of Google. That inquiry has now come to an end and reached a conclusion. There is nothing to suggest that anything other than the proper enforcement of the law as it stands has led the way to this particular conclusion.
The Minister has said much about bringing our tax system up to date for the 21st century and about closing the tax gap, which I welcome. None the less, we have in our business rates system, a tax regime that is hopelessly out of date, and the cross-party Business, Innovation and Skills Committee called for fundamental reform of it under the previous Government. May I urge him to be as ambitious as possible in that reform so that we can close the gap between online businesses and the bricks and mortar businesses on our high streets?
As my hon. Friend will be aware, the Government are reviewing the business rates system, and will report shortly. As far as my right hon. Friends the Chancellor and the Prime Minister are concerned—and as the Chancellor has made clear—we are looking to do that in a fiscally neutral way, and we have received many representations on that point.
Does the Minister not accept that this deal with Google, which most of us believe to involve a corporation tax rate of less than 3%, simply encourages tax avoidance by companies? If the issue was the amount of economic activity and assets held by Google in the UK, why are the Government not prepared to test that in the courts if necessary, and call its bluff?
HMRC has been conducting an inquiry in this specific case for a number of years, and has reached the conclusion that it is satisfied with the position that Google has reached. As for the additional payment, it is based on the facts that HMRC has seen, and on the detailed inquiry and exhaustive work that it has undertaken over many years, not numbers drawn up on the back of an envelope.
Hon. Members on both sides of the House share the public’s anger that Google has been able to get away with paying so little tax for so long, and many of them also share the feeling that this deal is unsatisfactory, but will the Minister confirm that the £130 million that the Government have extracted from Google is precisely £130 million more than the Labour Government ever got from it?
“O wad some Pow’r the giftie gie us/
To see oursels as ithers see us!”
I agree with the hon. Member for East Antrim (Sammy Wilson) that this will be seen by many small businesses the length and breadth of the country as unfair and not understandable. Surely, part of the problem, as a number of Members have said, is the sheer complexity of the system. Will the Government commit themselves to addressing that matter?
We always look to try to find ways to simplify the tax system. I would make the point that if a company operates in many jurisdictions, its tax affairs are inherently more complex than if it existed in just one country, but the Government are determined to ensure that where the economic activity occurs in the United Kingdom, we tax it in the United Kingdom.
Everyone wants business to pay its fair share of tax, and most people will welcome the additional £130 million of tax revenue to fund important services, but many will wonder, given that the period of the settlement covers 2005 to 2011, what other multinational tax bills are out there that have still not been settled and what, if anything, the Labour party did in government to highlight those questions?
May I gently chide the Minister, particularly given his last remark? Will he acknowledge the work of the cross-party Public Accounts Committee in the last Parliament? Its campaign on fair taxes by multinational companies was chaired by a Labour MP, the right hon. Member for Barking (Dame Margaret Hodge)?
There has been a shift in public opinion in recent years, and the pressure on companies to pay the tax that is due under the law is greater than ever before. I welcome that, and I welcome that change in public opinion, but it is the measures taken by this Government that mean that we are getting additional sums from large companies, as has been demonstrated in the past couple of days.
Following the successful Google settlement, will the Minister confirm that the Government will continue to work with our international partners and organisations such as the OECD to continue taking a lead to ensure that our tax laws are complied with—action that Labour failed to take over 13 years?
My hon. Friend makes an important point. It was very much the Prime Minister who got the OECD and the G20 to focus on how multinational companies are taxed. It is right that we did that and that we are making progress, and I am pleased that this is coming to fruition.
Will the Minister rise above the political bickering for a moment and, with Opposition Front Benchers, look at the real problem? These massive global companies are extremely clever. With great respect to the people at HMRC, who work so hard, those companies can hire the best accountants, the best tax experts and the highest paid lawyers. However we change the law, they will find a way around it. In Europe and in this country, we have to look at this in a much more sophisticated way.
I appreciate the hon. Gentleman’s comments, but he should not be quite so defeatist. If he looks at what happened over the previous Parliament, he will see that HMRC’s large business team brought in £38 billion in additional tax as a consequence of their intervention. The UK has a reputation as somewhere with competitive tax rates but where taxes do have to be paid. That is a reputation that we should all seek to maintain.
Although £130 million might seem low for a business as large as Google, is not the reality that the Revenue cannot do as much to collect back-taxes as we would like it to, because they come from a significantly more lax era? This morning one tax expert described the situation under the previous Labour Government thus: “Everything was above board, and the board was set at floor level.” Under this Government, the diverted profits tax gives us the opportunity to change the landscape, but is there not a concern that letting Google off paying the diverted profits tax suggests that the Revenue will find this significantly more complex to implement than we would like? What more can we do to give the Revenue the support it needs to apply that evenly and to all?
We always seek to ensure that HMRC has the powers and resources it needs. For example, in the July Budget last year we announced a requirement for large tax companies to set out explicitly what their tax strategy is, and we will be legislating for that in the Finance Bill.